The Disappearance of the Middle Class

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The Disappearing Middle Class

America is the one the wealthiest countries in the world. The benefits of being such a prosperous nation is found in the ability to produce a lifestyle for all of the inhabiting citizens. People are ranked in social hierarchies by the amount of profits that are produced independently or by household. Income division has created problems between social classes, primarily in the middle class. The middle class suffers more because it is the income bridge between upper and lower classes. This continuous financial strain has resulted in a steady reduction in the middle class of America.

Studies show that the middle class standard of living in America is declining do to wealth inequality, economic inflation, and international occupational relocation of large corporations. These factors are a few of many that hinder economic stability and reduce the size of the standard working class. Data and statistics are given to help us understand these issues and divert the trends that would destroy social standards.

Middle Class Inequality

Research indicates that there is a direct relationship between wealth inequality and a diminishing middle class. More wealth is taken from this social class and because of unequal taxation and wealth distribution. The wealthiest 1% own 35% of Americas wealth. Only 11% is owned by the bottom 80% of Americans. Additionally, since 2009 around 1500 households per year recorded an income of at least $1 million, but did not pay any federal income taxes on it (Fact Sheet: Taxing Wealthy Americans). Studies conducted after the 2008 recession indicate that the upper income families in American have an average of nearly 70 times more than lower income families. Because of the recession, the medium wage in the U.S. is $28,031, or approximately $13.50 per hour. This means, in reality, that half of working Americans make less than the minimum wage. Consequently, the cost of living for one person in the U.S. is $20,194 (The Pew Research Center).

The middle class has been considered the core of the nation for many decades, and must kept healthy for the county to continue the prosper and grow. According to a survey taken by The Pew Research Center:

"The wealth of U.S. families plunged as home prices began a rapid descent in 2006. By 2013, overall median wealth had decreased to $82,756, a loss of 40% in the space of just six years. Almost all of this erasure took place from 2007 to 2010, but there was no sign of a recovery from 2010 to 2013. Over the entire span from 1983 to 2013, the median wealth of U.S. families was up only 6%."

Wealth gaps during this time were also widened. The wealth of middle income households only saw a 2% increase to about $98,000, while the wealth of upper class households almost doubled to nearly $650,000.

In relation to wealth inequality, it is indicated that more wealthy Americans are privileged to receive greater amounts in tax breaks than the other classes. Some wealthy business owners and CEOs use a tax break loophole known as "S Corporations". This allows them to treat income as a salary rather than a profit, qualifying them to receive payroll taxes (Fact Sheet: Taxing Wealthy Americans). Tax fraud among wealthy Americans is common and repeatedly goes unchallenged. They use arrangements and subsidies that often deprive the working middle class of earned wages and benefits. The Internal Revenue Service reported that over 17% of taxes owed were not paid, leaving an underpayment of $450 billion each year. The largest shares of those come from underreporting of income. There is an estimated amount of between $21 and $32 trillion hidden in offshore accounts that goes untaxed. Due to an increasing speculation of wealthy wrong doing, Warren Buffett proposed a tax increase of a minimum 30% for the wealthy. This proposal will guarantee that the rich will not pay less that the middle class in income taxes. Most of the rich are now paying less than 24% in taxes (Fact Sheet: Taxing Wealthy Americans).

Fixed Income and Inflation

Households with fixed incomes are effected by the economy. Studies indicate that inflation is a major factor in middle class income reduction. Working class households become more impoverished due to the rising cost of commodities. Inflation brings financial shifts into the households of those that maintain inflexible incomes and relocates into the hands of businesses of and business owners. Middle class workers often suffer because their wages are not increased to accommodate the swelling cost of living index. According to Major Effects of Inflation:

"Wage earners may gain or lose profits depending upon the speed with which their wages adjust to rising prices. If their unions are strong, they may get their wages linked to the cost of living index. In this way, they may be able to protect themselves from the bad effects of inflation." (Article Library)

The cost of living has steadily decreased every year since 2009, however, inflation still effects many low and middle income households, causing them to seek government assistance. The number of those in households that receive government assistance has increasingly risen after the recession. Over 60% of Americans receive more in government assistance than they do income taxes. The Center on Budget and Policy Priorities (CBPP) issues entitlement benefits to elderly or disabled and households without jobs. The entitlements include social security, Medicare, Medicaid, children's health insurance, food stamps, school lunch programs, welfare, unemployment insurance, the Child Tax Credit and the Earned Income Tax Credit. Over 60% of middle class Americans receive these entitlements (The Washington Post).

The Outsourcing Effect

Every election cycle contains a portion in which outsourcing is a topic. The benefit of cheaper labor also leads to cheaper goods. Statistics, however, link job relocation to unemployment of the middle class. A. The North American Free Trade Agreement (NAFTA) established a ruling that Corporations could relocate to other countries and sell products back to the United States. NAFTA affected U.S. workers in several major ways. First, it caused the loss of some 700,000 jobs as production moved to Mexico. The majority of these workers suffered a permanent loss of income. When NAFTA became a law, employers took advantage of workers by forcing them to accept lower earnings and benefits. The constant emergence of U.S. businesses in Mexico caused a sharp decline in the agricultural and small business sectors. As a result, a surge in undocumented workers was recorded in the U.S. The NAFTA law was later applied to world trade. This led a tremendous amount of foreign low-wage workers (NAFTA's Impact on U.S. Workers).

The middle class worker has to compete with a continuously increasing number disadvantages while in the workforce. Data shows that the amount of high skill or high education careers are on the rise. According to The Huffington Post:

"A new report from the Federal Reserve Bank of New York shows that over the past 30 years, the U.S. workforce has shifted toward high-paying jobs that require a great deal of education - jobs in the legal, engineering or technology industries, for example - and toward low-paying jobs that require little schooling, like food preparation, maintenance and personal care."

"US-based multinational companies eliminated 1 million jobs from the US workforce between 1999 and 2010 while adding 3.1 million in other countries. If those companies had kept their domestic hires working instead of laying them off, the US unemployment rate in 2010 would have been 9.0 percent instead of the actual 9.6 percent" (The Huffington Post).

Industries that were once prevalent to the middle tier income such as teaching, construction, and transportation have seen decreases in the workforce, wages, and career life.

The recent recession affects have been felt in the economy. The more jobs that the middle class losses directly affect the size of the class. A study done by Think Progress says:

"Low-wage industries, where pay is between $9.48 and $13.33 an hour, have accounted for most of the employment growth four years into the recovery, even though they weren't where the majority of jobs were lost during the recession. They accounted for 22 percent of the losses and have made up 44 percent of the recovery's gains, while high-wage industries saw 41 percent of the losses but have only made up 30 percent of the gains."

In order to counter the effects of inflation, many government officials have proposed to increase the nations minimum wages average. The current average is set at $7.25. Since the recent debates have taken place only 20 state have changed their wage average to $10.10 per hour. The problem that middle and lower income tiered Americans face with an increase to the federal average is that the increase of the wages may not account for inflation. Prices for commodities will rise as well as the amount that each person owes in taxes.

Conclusion

The middle class has fair amount of issue that need to be resolved in order for it to maintain its position of relevancy in the United States. There is an enormous database that archives the many reasons why this social class is diminishing. Wealth bias, corporate fraud, tax evasion, inflation, and outsourcing are a few of the problems that middle Americans face. The importance of the middle class is not depending on emerging economic markets to survive. Economist who have studied the life line of this class have discovered that much of the spending habits are different. Many Americans simply making more money, earning their way into higher tax brackets. Studies show that over 669 million people moved to higher tiers since 2001 (The Pew Research Center).

As the country continues to recover from the recession, the working class continues to stabilize and grow. More jobs are being created every day. Electing officials that will help keep jobs here in America as opposed to outsourcing, should be a priority for middle and lower class citizens. Prioritized spending and investments help with wealth preservation. Investing in skills or career education can help many to are uncertain of future inflation occurrences. One of the advantages of being a citizen of a wealthy nation is that individuals that are effected by economic circumstances often have the opportunity to change their situation. If one is of a lower class, they have a chance to go to a higher class.

Hi Jackson, you can see detailed corrections in the descriptions below. I hope you can follow through.

1st paragraph:- The benefits of being such a prosperous nation isare found in the ability... (the subject is 'benefits' (plural))- ...the ability to producechange/enjoy/have/lead/adopta lifestyle for all of the inhabiting citizens. (Lifestyle is not something that can be produced. That was inaccurate collocation.)

3rd paragraph:- The wealthiest 1% own 35% of AmericasAmericans wealth.- This means, in reality, that half of working...- ...must kept healthy for the county to continue the prosper and grow.

6th paragraph:- Households with fixed incomes are effectedaffected by the economy.

7th paragraph- The cost of living has steadily decreased every year since 2009; however, inflation... (or "However, inflation...")

8th paragraph- Data shows that the amount of high skill or high education careers areis on the rise. (the subject is 'the amount' not 'careers')

Conclusion paragraph- ...few of the problems that middleMiddle Americans face.- EconomistS who have studied...- Many Americans are simply making more money, earning their way into higher tax brackets.- ...individuals that are effectedaffected ...

Hi Jonathan, as I read through your research paper, I must say, it's one of those papers that one would love to review, not only did you make sure that the paper is presented well by highlighting each and every leg of the research, you also made sure that each and every paragraph coincides with the flow of ideas from the previous paragraph.

Moreover, I love the fact that the information is not overwhelming, your personal insights also helped in giving a personal touch ti the research, this is needed in each and every work that we do, this only means that you're not writing for the sake of it but for the purpose of imparting valuable information to your readers, it seems as though you embodied the thought of thinking before putting it in writing and this is a very good trait of a writer.

Overall, it is a well written essay, however, for future writing reference, try to write the work cited alongside the sentence or sentences extracted in the essay as this ease the fact finding committee that will critique your work and this practice will go along way, so far this is what modern research papers are trying to create but you still have to include that citation page as a summary to your work. I hope to review more of your essays soon.